The month in review: Newcastle
By Herron Todd White
How is 2015 going to look from a property perspective in the Hunter? The biggest news in town is the truncation of the rail line into the centre of Newcastle from Wickham. Lots of divided opinions on this one although at this point in time, traffic flow through Newcastle appears quicker, but a sample size of January school holidays is probably not long enough to adequately tell.
In this column we have picked a couple of suburbs to highlight from various perspectives. First up is Wickham which is a vibrant up and coming suburb that if compared may resemble the hip suburb of Brunswick in Melbourne. With its industrial history you can find terrace houses intermixed with older warehouses and the addition of some funky cafes and boutique retail stores could really make this area thrive. We have seen good growth and strong demand for residential property in this location and coupled with a relatively tight rental market, we foresee further growth. The ever expanding University of Newcastle has a second city-based campus in the construction phase expected to be completed by 2016 which could only help with growth prospects.
From a straight investment perspective Jesmond and Birmingham Gardens still offer plenty of upside. There is continued strong demand for rentals within Birmingham Gardens as the close proximity to the main campus of Newcastle University allows students to live within walking distance but still have the independence of living off campus. The demand for rentals in this area could be expected to continue to rise with the expansion of the University and the appeal of the cosmopolitan nature of the city. This can only mean upside for values in the short to medium term.
Nelson Bay is a strong getaway destination for families and is enjoying sustained patronage from retirees downsizing from larger city homes to a more sustainable beachside dwelling. After many years of negative growth and over representation of mortgagee in possession sales, 2014 was a year of growth and increasing returns. We expect this to continue into 2015 with ongoing low interest rates expected. This is welcome news for home owners in the Bay area after years of wondering when it was gong to be their turn.
We have spent a fair while highlighting the Singleton situation and we haven’t seen any signs that will change our commentary in the short to medium term. Mines significantly scaled back investment in 2014 cutting jobs and costs, which trickled through to the entire economy in and around the town. This has increased the pressure on people seeking employment and speculation of further cuts is high.
A vast amount of the population living in these suburbs is employed within the mining industry and if these job cuts continue we could see an adverse impact on the housing market out in theses rural areas. We have seen rental rates fall significantly and have also witnessed discounting of prices in order to achieve a sale.